Dogma No More – Part 1

“I think I’ve seen that film. With the two dopey guys and that Mexican lassie wi’ the big -“

“Dogmatic! I said I can’t be so dogmatic, Keith. Nothing to do with a film”

My exasperation came from trying to explain that with our budget and the club’s vision of youth development we had to be flexible with our tactics and our economics. To be more pragmatic and less fixated on my own tactical preference.

“Besides Mallrats is a much better film”

Each year our first team squad is going to change – it’s a fact of life for clubs the size of Motherwell FC. Our best players will always have a bigger offer from elsewhere to turn their heads.

It’s a cycle that we must turn virtuous. Players perform well, we sell them for profit and reinvest in the club’s facilities to develop our next crop of young players.

A few things need to be analysed for this to work – in the first part of this article, I focus on the financial side.

Point Number One: The Cost of Youth Development

Many folk consider bringing through players as the cheap way of doing football. On the surface the comparison is a simple calculation of huge transfer fee versus zero transfer fee. But that really doesn’t take in the financial and human resource investments required to run the “Reserves and Unders” to bring through players.

Youth Development is not FREE.

Let’s look at the financial costs of youth development at MFC.

Staff

Head of Youth Development

Just the one and only – Stevie Hammell – £41.5k p/a

hammell-hoyd

Reserve Team Staff

Manager – Maurice Ross – £41.5k p/a

ross-resman

Assistant Manager – Ian Durrant – £18.75k p/a

Physio – Aileen Anderson – £9.25k p/a

Sports Scientist – Michael King – £26.5k p/a

U18s Team Staff

Coach – David Clarkson – £32.5k p/a

clarkson-u18scoa

Physio – Andrew Blair – £10.5k p/a

Annual Cost of Staff = £180,500 

Players

The following are all potential and actual costs:

  • Basic Wage
  • Loyalty fee
  • Agent fee
  • Individual Performance related bonuses
  • Team bonuses

I take the approach that bonuses are costs recouped in prize money and Agent Fee/Loyalty Fees are one off recruitment/retention costs so I am not including these in my annual budget under Youth Development costs. Instead I am only interested in Basic Wage.

reserves-contracts

Reserve and U18s Combined Annual Salary  = £371,250

Associated Costs

At Motherwell FC in the books we have an expenditure called Youth Setup – this is an explicit expense and easy to add into our calculations.

Current Monthly Average = £42,151

Annual Cost of Youth Set Up = £505,812

youth-setup-expenditure

However there are other costs in our Finances that are caused by business of playing football and therefore should be split between the First Team and others. These include:

  • Matchday Expenses
  • Ground Maintenance
  • Travel Costs
  • League Fines

Both our reserve teams play their home games at Forthbank Stadium rather than Fir Park and they’re unlikely to be using the luxury Party Bus so I don’t think it is a stretch to save 95% of these costs are for the First Team.

Current Monthly Average = £7156

Annual Cost of Associated Playing Costs = £85,872

Total Annual Cost of Youth Development

Are you ready for this? Drum roll please……

Reserve and U18s Coaching Staff  £                  180,500
Reserve and U18s Playing Staff Wages  £                  371,250
Youth Set Up  £                  505,812
Associated Playing Costs  £                    85,872
 £              1,143,434

Not much change out of £1.2million.

Point Number Two: Selling For Profit

Easy. Sell for more than you bought him for. Is it that simple? Is transfer fee the only financial outlay? Sorry. There’s a bit more to it.

We’ve already covered the potential and actual costs of having players outwith any transfer fee paid. So we must consider that as part of his cost contribution.

We’ve also got to remember that when we sell – are we getting the full amount of the transfer? Look out for those clauses that you threw in to get your man but never considered it to bite you in the arse.

  • Sell On % Fees to be paid to previous clubs
  • Sell On Fees to be paid to the Player

Is Selling The Correct Option?

The impact of selling should also be considered – this might not appear to be a financial consideration but it can indirectly affect your bottom line.

Consider the sale of a player who has come through your ranks to be a top performer with your team but you sell him.

  • The fans are angry – he’s a folk hero – less shirts sold; less tickets sold; less matchday income
  • The Squad Harmony goes – we lack depth in Departed Player’s department; Sad faces all round; poorer performances = less wins = less prize money at the end of the season
  • The team is poorer – why wouldn’t it be – there was a reason he was bought – he was a good footballer – as above results get worse and you start winning less; less prize money as above; football is poor = less fans and we’re back to matchday revenue dropping again.

Christ – I’ll need to bring someone in! Hey it’s shopping time! More money on its way out of the club.

I’m not going to try to quantify the impact here but keep it in mind.

Step Forward – A Development Hero – Liam Donnelly

Yes, it’s a big spoiler but sad to say that our midfield beard-wearer from Norn-Iron left us in the January transfer window to join English Premier League side Norwich. This is what it’s all about though so let’s not get too sad. Besides this is Finance – a cold, cynical world where emotion gets people fired.

donnelly-sold

The Income breakdown on Liam’s transfer was £900k up front followed by £800k over 12months in 3 installments. We also have a 40% of Profit sell on clause which could get cashed in sometime in the future.

However, there are three Solidarity payments (steady Tommy – nothing to do with you) – thankfully all are mercifully small % fees with a total paid out of £50.1k.

Donnelly cost us £20k to buy from Vanarama National side, Hartlepool in 2018/19 season. A bargain! He was at the club for One and a Half Years on wage of £55k p/a. So we paid him £82,500 as part of his Development Cost.

Transfer In  £              1,700,000
Transfer Paid  £                    20,000
Solidarity Fees  £                    50,100
Development Cost (eg Wages)  £                    82,500
Profit / (Loss)  £              1,547,400

The Impact?

Well, I think we can safely say we sold for profit on this deal! But to put into full context – Donnelly’s sale has paid for 1.4 years of Youth Development Costs. Fantastic!

Thanks Liam.

 

Summary

Thanks for reading along so far – hope you enjoyed this first of a two part article looking at how life at Motherwell Football Club must put Pragmatism above any footballing Dogma. This part focused on the financial side, the second part will look at tactics and how we get the best out of individuals to get their transfer value up whilst still meeting club vision.

You can reply in the comments below or get me on Twitter and FM Slack (Badger FM Samo or Mr Keysi Rensie for a link to join).

Cheers, Stuart

One thought on “Dogma No More – Part 1

  1. Reblogged this on Black Sea FM and commented:
    Du Malone writes: I hesitate to reblog two posts on the same day, but I have just come across this and thinks it’s excellent. The main attraction for me is the hard-headedness of the cost/benefit analysis of youth development. I’m also intrigued by the developing pragmatism vs dogma theme: I hope they’ll be more of that.

    Liked by 1 person

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